Lawsuit threatened on listings

Power shift feared in merger of 2 big Realtor services

After nearly two years of study, the proposed consolidation of Chicago's two home-listing services has been thrown into doubt by the threat of a lawsuit.

Five of the 10 Chicago-area Realtor associations that own the Lisle-based Multiple Listing Service of Northern Illinois have told its board of directors that they object to the plan to unite with MAP MLS, a smaller firm based in Palatine.

Legal counsel for the associations last week sent a letter to directors outlining the group's demand for further due diligence before creating a subsidiary that would combine the listings services.

"We hope we don't have to sue, that it doesn't come to that," said Nancy Sobel, president of the McHenry County Association of Realtors, one of the five groups. But she said it might be necessary if MLSNI's plan fails to protect the financial interests of its membership.

"You can't ignore the message that we are here," she said of the letter. "The board of directors is going to make their decision, and if they arrive at that decision in an improper fashion there will be a suit to contend with."

The split is the latest chapter in a two-year rift at MLSNI, which, with more than 50,000 members, is one of the nation's largest home-listing services. In 2004 three major Chicago-area brokers pulled their North Shore listings out of the service in a dispute over administrative policies, a move that set off a year of board upheaval and culminated in the firing of the service's chief executive.

The three brokerages returned the listings early in 2005, in what their executives described as a good-faith gesture toward studying the creation of one Chicago-area listings service.

In August the board voted to proceed with the plan so it could be presented to MLSNI shareholders.

However, about that time, some MLSNI directors objected that the plan would be prohibitively costly and that control of the new entity would shift toward the major brokerages and away from the local Realtor associations, eventually to the detriment of smaller brokerages.

Loretta Alonzo, a La Grange Park broker who is president of the MLSNI board, said the listing service is trying to resolve the dispute.

"We know they have issues and we're trying to work toward a resolution," said Alonzo, who was named by the board to be its sole spokesman. Alonzo also is a director of the West Towns Board of Realtors, one of the dissenting associations. She said, however, that her first fiduciary responsibility is to MLSNI.

"The board hasn't completed the due diligence of the transaction, and we're working toward that. They have some valid points," Alonzo said of the opposing group. "It wasn't like we were ignoring them or trying to push the transaction through."

Alonzo said the MLSNI board would meet Oct. 18 and could consider voting to send the proposal, as structured, to its shareholders.

The five dissenting associations--representing National Association of Realtors members in the Aurora area, the Fox Valley area, Oak Park, McHenry County and West Towns (based in Cicero)--represent about 13 percent of MLSNI shareholders' votes, according to proponents of the deal.

Two board members, who asked not to be identified, said some brokerages and Realtor associations are so weary of the impasse that they might pull out of MLSNI and create their own listing service.

The five other voting members of the board "are fed up with this," said one board member. "They see they are powerless, even though they have a majority of members [among the shareholders].